supatrada and all, good points and questions today.
All I can go by are 3 out of 4 key sources of information on the current o/s:
1) 2-2's pr
2) 2-2's filing
3) The T/A's confirmation of the O/S both Thursday and Friday.
The 4th key source is discussion and clarification direct from the company which has yet to occur.
The two anomalies I see are:
I) The first three trades on the day of the R/S (.10, .15, third being .0015).
After that trade MM's traded this at .00.. levels until Thursday's revelation and buzz.
II) MM's trading this stock on what seems to be a pool of shares larger than the reported and confirmed O/S.
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We are seeing either:
1) Some quiet issuance that doesn't pass through the T/A.
(Note the T/A said all new shares, even previously restricted would have to come through him. Also such dilution would have to have occurred by the third trade on 2-2, which is the effective day of the R/S. That just doesn't make sense. Next, Thursday and Friday showed strength which flies in the face of the effect of dilution.)
or...
2) MM's mistakenly and wrongfully are trading a larger pool of shares than the true O/S.
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Important to us, what if it's #2 above??
I don't care if they are punished or not if #2 is true, all I care about is the true reflection of the stock price as a result. So how will it or should it play out?
If #2 is the case, the company and shareholders should not be punished. In thinking about this, shareholders rightfully deserve to be treated fair with a true reflection of the pps at the time of any correction.
The correction should be VALUE first, then a correction in shares to equal the o/s. An example is the best way to help see this. Example: JoeInvestor owns 50,000 shares and say the price just before the correction (when the MM's were manipulating the price with the larger pool of shares) is .02.
Again, just using it as an example, the corrected price (based on the true O/S) should be .08. Because in this example we are assuming the trading after the R/S has manipulated by the MM's, Joeinvestor's correction would be value first, meaning $4,000 (50,000 shares * .08), with MM's being forced to cover this value because they created the situation where the shareholders owned in excess of the o/s. Only after the value correction should share amounts for all shareholder's be adjusted to reflect the true o/s of 1.1 million shares.
Joeinvestor bought his shares in good faith, as we all did.
It would be the MM's who acted in bad faith and manipulation.
Call this "If I ruled the world" solution to the problem if #2 is the case. It is the solution fair to shareholders who were subject to MM manipulation because MM's knowingly traded and thus able to manipulate trading and the price.
So is it Door#1 or Door#2 ?? : )
Bo
